Govt moves to sell 42% stake in Indosat

The Jakarta Post, Jakarta

Moving in accordance with its privatization drive, the government said Thursday it had planned to sell an almost 42 percent stake in state-owned telecommunications firm PT Indosat through a strategic sale.

The government said, in a release, it had named state-owned brokerage firm PT Danareksa Sekuritas and Credit Suisse First Boston (Singapore) Ltd. as financial advisers for the sale.

This should reaffirm earlier statements by State Minister of State Enterprises Laksamana Sukardi expressing optimism over reaching this year's privatization proceeds target of around Rp 3.9 trillion (US$438 million).

The release did not disclose how much profit the government could expect from the sale, but it would be a considerable sum of money, serving as a last-ditch effort to meeting the privatization target.

The publicly-listed Indosat is one of the five state-owned enterprises (SOEs) in which stakes are to be sold in the second semester of this year to meet the privatization target.

Rejections from various parties, usually with vested interests, has led to disappointment in terms of executing the planned privatization program.

So far, the government has only managed to raise around Rp 2.26 trillion in privatization proceeds. Worse still, the poor record had forced the government to revise down its target to Rp 3.9 trillion from the initial target of Rp 6.5 trillion.

Given its wide-ranging network, the government is pinning its hopes on Indosat to contribute the lion's share of the remaining proceeds.

The government, which previously had 65 percent of Indosat, in May sold an 8.1 percent stake for $110 million. There are a total of 1.04 billion Indosat shares.

As stated in the press release, potential investors must have a minimum of $450 million in total assets, as well as proven experience in the industry.